TNL Take: As casino’s continue to see a dwindling return on gambling revenues and how to get the millennials back in the door, they’re looking at esports to help grow their business.

Today we’ll take a deeper dive into MGM and where the chips are being placed.

01/ DEDICATED GAMING AREA

Opened in late 2016, MGM spent $2M+ converting the former Rainforest Cafe into LEVEL UP, a dedicated gaming and esports entertainment lounge.

The 12,000-square-foot gaming area opened with standard fare like pool and foosball but also includes a laser golf course using AR technology and a VR experience.

In 2017, MGM made several moves to incorporate gaming and esports further into LEVEL UP which we'll get to below.

/02 ESPORTS EVENTS

MGM properties have hosted a slew of esports events including the 2016 League of Legends Spring Finals and MLG Las Vegas, both at the Mandalay Bay Resort and Casino. In early 2017, Dreamhack Masters Las Vegas featuring 16 teams and a $450,000 prize pool was held at the MGM Grand.

Recently, the MGM National Harbor in Maryland held the Rocket League Season 4 Championships.

To date, no one casino has held as many big esports events at their locations as MGM properties have.

/03 SKILLED BASED GAMING

While slots contribute to a casino’s bottom line, they’re not being played by the younger audience. So what do you do? Combine video games and gambling — sorry skill based gaming.

In February of 2017, MGM installed Konami's first skill-based gaming machine, Frogger: Get Hoppin’, within LEVEL UP with a $2 minimum wager. MGM has also held free entry tournaments around Frogger as well.

In may, MGM Resorts International announced a partnership with Gamblit Gaming to bring two more skill based gaming titles to LEVEL UP — Gamblit Poker and Cannonbeard’s Treasure.

While the jury remains out on the monetization potential for skill based gaming, there’s clearly a need for the casino’s to bring back millennials to the table.

/04 ESPORTS VENUE

Things start to get bigger now.

Allied Esports and Esports Arena announced to build an esports venue at the Luxor Hotel and Casino; which it makes it the first permanent dedicated structure on The Strip when it opens this year.

The former nightclub is being turned into a 30,000 square foot arena, which will include daily gaming stations and more uniquely, food made by renowned chef Jose Andres.

This partnership shows that MGM is committed to esports in Vegas and that the a permanent space can service both daily clientele as well as larger events at broadcast quality.

/05 INVESTMENT

Late last year, MGM made a seed investment into Foundry IV, led by Tobias Sherman formerly of WME | IMG. Foundry IV is a new game studio that's looking to create the next big esports hit along with new revenue models.

"As a leader in the entertainment industry, we are focused on the continued evolution of esports and its importance as a strategic initiative for our company," said Rick Arpin, SVP of Entertainment for MGM.

MGM's involvement in Foundry IV could be used for anything from esports gambling, viewing parties to regional events.

MGM has made plenty of bets across the esports ecosystem and will be exciting to see what else 2018 has in store.